How Sony failed to Connect, again

Early in 2005, more than a dozen Sony employees from the company's consumer electronics divisions gathered for an unusual meeting in the tiny Palo Alto, Calif., headquarters of digital media start-up Kinoma.

Kinoma Chief Executive Peter Hoddie, an Apple Computer alumnus, had been put in charge of high-profile Sony software development, including the Connect digital music project. For a company historically averse to using outside technology, this was a significant step.

For more than two hours, the group met in the futon-lined public area of Kinoma's offices. According to attendees, Hoddie gave a sales pitch, but not much more. When asked for details on the technology they'd be using for Connect, Hoddie declined to provide them, and the meeting turned contentious before breaking up, employees said.

Programmers went to work on the project, intended to be Sony's answer to Apple's iTunes. But the tone had been set for a dysfunctional mix of politics, programming and pique that would prove deeply destructive to Sony's digital music ambitions. Fourteen months later, a disastrous product launch doomed Sony's latest attempt to catch Apple.

"There were a lot of problems with Connect, but there were some things that could have gone right," said one Sony employee familiar with the project's history, who like most of the insiders interviewed for this story, asked to remain anonymous. "The software was on a trajectory to be OK. But that got wiped out."

The effects continue to resonate inside Sony. On Tuesday, CEO Howard Stringer informed the company that Phil Wiser, a Connect champion inside Sony and chief technology officer for Sony Corp. of America, would be leaving effective Friday, sources close to the company said.

Wiser is leaving to join a Silicon Valley-based digital home entertainment firm called Building B, according to a source familiar with his plans. The Connect division is being taken over by Steve Bernstein, a Sony senior vice president who previously oversaw the company's Media Software group.

A Sony representative declined to comment for this story, or to provide Sony executives to discuss the company's music business. Hoddie also declined comment.

The effort to reel in iTunes opened the door to Sony's ultimately unsuccessful flirtation with another company's technology--a relationship that's continued in Kinoma's oversight of Sony's highly touted eBook project.

Why did the electronics giant turn so uncharacteristically to an outsider for technology so critical to its future?

Past and present insiders at Sony say Apple's meteoric rise in music has left top Sony executives with both respect and envy for Apple's products, even while they resist becoming dependent on Microsoft's digital music technology.

Kinoma and Hoddie appealed to their envy of Apple and their aversion to Microsoft.

From QuickTime's creation to Sony's secret weapon Hoddie is far from a household name. But he's well known in digital media circles.

Before striking out on his own, Hoddie spent 10 years at Apple, serving as team leader and chief architect of the company's early QuickTime multimedia software project. People who worked at Apple during that time say much of the early code was Hoddie's, and in the days before it was ported to the Windows platform in 1994, he was one of the only people at Apple to have a full picture of the software's code base.

"He was an absolutely brilliant individual, and one of the great treasures of Apple," said Jonathan Hirshon, a technology marketing consultant who served as a technology evangelist on Apple's QuickTime team.

...and do for video what Apple did for music. The metrics and models between music and video do not completely match, but video content needs to evolve like music content has.

Apple's foray into video is limited because they are not owners of the content. They are limited to brokering deals. Sony owns content and could start distributing it however they please and foster consumer demand. This applies to VoD, rental, and broadcast with consumer acceptable digital rights. Others would fall in line.

Add to this transfer capabilities to PSP, possible TiVo software on the PS3, and you have a real competitive offering.

"Apple's foray into video is limited because they are not owners of the content."

I'm trying to figure out how you could have come up with such a comment when everything else goes against it. Apple doesn't own the music on iTunes, so why isn't their foray limited? Sony owns a record label, yet their foray in music limited.

Apple's foray in video is limited because they make it so. They are testing the waters. Has nothing to do with not owning the content.

...and do for video what Apple did for music. The metrics and models between music and video do not completely match, but video content needs to evolve like music content has.

Apple's foray into video is limited because they are not owners of the content. They are limited to brokering deals. Sony owns content and could start distributing it however they please and foster consumer demand. This applies to VoD, rental, and broadcast with consumer acceptable digital rights. Others would fall in line.

Add to this transfer capabilities to PSP, possible TiVo software on the PS3, and you have a real competitive offering.

"Apple's foray into video is limited because they are not owners of the content."

I'm trying to figure out how you could have come up with such a comment when everything else goes against it. Apple doesn't own the music on iTunes, so why isn't their foray limited? Sony owns a record label, yet their foray in music limited.

Apple's foray in video is limited because they make it so. They are testing the waters. Has nothing to do with not owning the content.

The first company to drop DRM across its entire catalog and open up a music store for their stuff and sell direct cutting out all the contenders (iTunes, Napster, whomever) is going to dropkick the sales charts out the window. EVERY other company will closely envelope themselves in their protective DRM and watch their sales drop. And whoever the biggie is who had no fear will start to totally kill the competition. Granted if it's Sony they'll have to be happy with just doubling or tripling their music sales and slide by with whatever MP3 (not AAC, not WMV) player they can cobble together. Artists at all the other labels will abandon ship the instant their contracts expire. Next the label should ENCOURAGE P2P of all that downloaded music. The totally sneaky idea is to build a rep as the corporate behemoth who loves (not hates and despises) their customers. Those customers would be drawn under the spell like rats before a cobra. They'd have no choice but to buy, and buy and buy. Even buy stuff they would never have thought to buy before because they happened across some interesting stuff via P2P.

Imagine, music fans LOVE their artists and also LOVE the publisher. Now that is science fiction if I ever heard it. Hey, maybe Pixar could make a movie. Have to be animation though cause no one living would dare appear in it for fear of ...

The first company to drop DRM across its entire catalog and open up a music store for their stuff and sell direct cutting out all the contenders (iTunes, Napster, whomever) is going to dropkick the sales charts out the window. EVERY other company will closely envelope themselves in their protective DRM and watch their sales drop. And whoever the biggie is who had no fear will start to totally kill the competition. Granted if it's Sony they'll have to be happy with just doubling or tripling their music sales and slide by with whatever MP3 (not AAC, not WMV) player they can cobble together. Artists at all the other labels will abandon ship the instant their contracts expire. Next the label should ENCOURAGE P2P of all that downloaded music. The totally sneaky idea is to build a rep as the corporate behemoth who loves (not hates and despises) their customers. Those customers would be drawn under the spell like rats before a cobra. They'd have no choice but to buy, and buy and buy. Even buy stuff they would never have thought to buy before because they happened across some interesting stuff via P2P.

Imagine, music fans LOVE their artists and also LOVE the publisher. Now that is science fiction if I ever heard it. Hey, maybe Pixar could make a movie. Have to be animation though cause no one living would dare appear in it for fear of ...

Yup, Sony wasn't always successful with their standards but people tend to forget that standards as CD / DVD / Floppy Disk and a lot more were also originally 'Sony Only' You'd be suprised how many technologies (most of them not that well known maybe) are used in everyones life as being de-facto standards today that were invented and pushed by Sony.

Of course not all worked out fine, that's the risk you have if you dare to be a trendsetter rather as a follower, but in some cases this was fair, in other cases not. People like to make fun about ATRAC, but as a Sony Walkman owner I can use both ATRAC as MP3 on my PC using the sony soft and I can ensure you the quality of the ATRAC songs is superiour to MP3. It's not because MP3 has become popular since you can copy freely without wondering about legal aspects that the quality is good. I hear nobody complaining about Apple's non-proprietary format called i-Tunes, which is far more restrictive than Sony's one for instance.

UMD is to be used for PSP only, I don't hear anybody complain they have to use cartridges in their nintendo's so what's the point ? Would a full sized DVD have been a better approach ... nah, guess not...

Yup, Sony wasn't always successful with their standards but people tend to forget that standards as CD / DVD / Floppy Disk and a lot more were also originally 'Sony Only' You'd be suprised how many technologies (most of them not that well known maybe) are used in everyones life as being de-facto standards today that were invented and pushed by Sony.

Of course not all worked out fine, that's the risk you have if you dare to be a trendsetter rather as a follower, but in some cases this was fair, in other cases not. People like to make fun about ATRAC, but as a Sony Walkman owner I can use both ATRAC as MP3 on my PC using the sony soft and I can ensure you the quality of the ATRAC songs is superiour to MP3. It's not because MP3 has become popular since you can copy freely without wondering about legal aspects that the quality is good. I hear nobody complaining about Apple's non-proprietary format called i-Tunes, which is far more restrictive than Sony's one for instance.

UMD is to be used for PSP only, I don't hear anybody complain they have to use cartridges in their nintendo's so what's the point ? Would a full sized DVD have been a better approach ... nah, guess not...

I'm been wondering for MANY months now just why it is taking so unbelieveably long to get the new ebook reader to market. It's hardly some radical new technology, the display (eInk) is very cool, but the underlying tech of the device is far more "off the shelf" than "cutting edge." It's like taking the guts of a PDA and slapping a new (vastly improved and lower power) lcd into it. How hard is that?

Obviously the "how are we going to make an iTunes for books" problem is (as this article helpfully describes) the real crux of the issue. And also obviously Sony can't seem to find the answer to that question.

The funny thing is that I (and I suspect a huge portion of the potential ebook market) couldn't care less when/if they get their iTunesForBooks equivalent done. I want to buy the reader right now simply to display my own reference content on. I have basically no interest in buying a DRM "a la carte" copy of a Grisham novel, etc. anyway.

So the irony is that potential customers like me can't buy the hardware because the store isn't ready yet.

Hopefully Apple will come into this and just take the whole market overnight. They really should. If Apple licensed the eInk screen, made a reader and then added a books section to Itunes, they'd own the game instantly. I find it strange that they haven't wanted to get into this.

I'm been wondering for MANY months now just why it is taking so unbelieveably long to get the new ebook reader to market. It's hardly some radical new technology, the display (eInk) is very cool, but the underlying tech of the device is far more "off the shelf" than "cutting edge." It's like taking the guts of a PDA and slapping a new (vastly improved and lower power) lcd into it. How hard is that?

Obviously the "how are we going to make an iTunes for books" problem is (as this article helpfully describes) the real crux of the issue. And also obviously Sony can't seem to find the answer to that question.

The funny thing is that I (and I suspect a huge portion of the potential ebook market) couldn't care less when/if they get their iTunesForBooks equivalent done. I want to buy the reader right now simply to display my own reference content on. I have basically no interest in buying a DRM "a la carte" copy of a Grisham novel, etc. anyway.

So the irony is that potential customers like me can't buy the hardware because the store isn't ready yet.

Hopefully Apple will come into this and just take the whole market overnight. They really should. If Apple licensed the eInk screen, made a reader and then added a books section to Itunes, they'd own the game instantly. I find it strange that they haven't wanted to get into this.

1. Get out of the content business. Focus on what they were good at in the past: hardware (and they'll need to develop the talent to create great software to run that hardware).

2. Forget about locking in their customers. Sell the best solution and they won't have to force consumers to continue to use their products. It should be company policy that anyone using the word "proprietary" as a positive feature of a Sony product should be counseled the first time, then fired for the second offense.

1. Get out of the content business. Focus on what they were good at in the past: hardware (and they'll need to develop the talent to create great software to run that hardware).

2. Forget about locking in their customers. Sell the best solution and they won't have to force consumers to continue to use their products. It should be company policy that anyone using the word "proprietary" as a positive feature of a Sony product should be counseled the first time, then fired for the second offense.

I guess all the articles about Sony say how hard it is for them to work across groups. At Apple that seems to be easy and that's why their products are pretty much well connected. If they merge, it really wouldn't help Apple which is quite nimble lately.

Apple is a one trick pony, and even the i-Pod is not manufactured by Apple, only designed. It was the right product at the right moment at the right time but that's it. More and more it's getting clear the iPod is in collision course with music phones and they won't be able to stop that. Currently the total amount of music enabled phones is pretty close to the amount of iPods, and it will soon be surpassed as people prefer to have one device rather as 2 or 3 to do the job. Highend iPods will of course stay intresting because of the diskspace and additional features, but the competition ain't doing nothing either ...

Apart from that Steve Jobs may have done some good things lately with Apple, but older people amongst us migth still remember the terible shape of the company when he left it during his previous live as CEO of Apple...

I guess all the articles about Sony say how hard it is for them to work across groups. At Apple that seems to be easy and that's why their products are pretty much well connected. If they merge, it really wouldn't help Apple which is quite nimble lately.

Apple is a one trick pony, and even the i-Pod is not manufactured by Apple, only designed. It was the right product at the right moment at the right time but that's it. More and more it's getting clear the iPod is in collision course with music phones and they won't be able to stop that. Currently the total amount of music enabled phones is pretty close to the amount of iPods, and it will soon be surpassed as people prefer to have one device rather as 2 or 3 to do the job. Highend iPods will of course stay intresting because of the diskspace and additional features, but the competition ain't doing nothing either ...

Apart from that Steve Jobs may have done some good things lately with Apple, but older people amongst us migth still remember the terible shape of the company when he left it during his previous live as CEO of Apple...

Being an owner of a Sony MP3 player I must say that... the hardware is great and the software is totally deficient. Connect is slow, clumsy and the systematic transformation of MP3 in ATRAC just adds more trouble to any synchronisation (which is awfully slow).

But I do not applaud iTunes and iPod. I believe that the DRM battle between Sony, Microsoft, Apple and a few others to set up a proprietary standard is wrong for the market. Open standards should be the norm, or at least stick with actual standards (MP3, MPEG).

Sony wants to stick with FSK? Then no wonder if they go again into the wall.

It is time to revise a misconception: the classical sales model for content is past. The success of Apple is not from iTunes but the fact that you can play MP3 tunes on your iPod.

iTunes is marketing. The big money comes from hardware at Apple - ask Samsung which has lost the compression chip manufacturing contract.

Sony has to innovate by:&gt; selling its music business&gt; champion open standards&gt; design and manufacture good hardware

Being an owner of a Sony MP3 player I must say that... the hardware is great and the software is totally deficient. Connect is slow, clumsy and the systematic transformation of MP3 in ATRAC just adds more trouble to any synchronisation (which is awfully slow).

But I do not applaud iTunes and iPod. I believe that the DRM battle between Sony, Microsoft, Apple and a few others to set up a proprietary standard is wrong for the market. Open standards should be the norm, or at least stick with actual standards (MP3, MPEG).

Sony wants to stick with FSK? Then no wonder if they go again into the wall.

It is time to revise a misconception: the classical sales model for content is past. The success of Apple is not from iTunes but the fact that you can play MP3 tunes on your iPod.

iTunes is marketing. The big money comes from hardware at Apple - ask Samsung which has lost the compression chip manufacturing contract.

Sony has to innovate by:&gt; selling its music business&gt; champion open standards&gt; design and manufacture good hardware

The problem/challenge with Sony is that the products they offer to the U.S. market is different from the one they have in Japan. This "dual-production" method will, and it has, kill any company's chance to compete and stay on top. Sony is dying from this crazy, and unexplicable production practice.

All MP3 manufacturers are dying to kill Apple's domination of the market. But, they keep releasing product after product without any proper planning. Sure Apple spends a fortune on marketing. But, they only have a limited number of products "iPod, iPod Shuffle (which it seems to be on they way out, and iPod Nano. That's it. These products evolve and are phased out or replaced with better products as the technology progresses. That's it. No, "20 or 25 different products released annually."

Simple. Produce a limited amount of items, support and develop them. Connect could have a chance as long as they orchestrate their strategy smartly.

But, if Sony continues this failing strategy, they don't stand a chance.

The problem/challenge with Sony is that the products they offer to the U.S. market is different from the one they have in Japan. This "dual-production" method will, and it has, kill any company's chance to compete and stay on top. Sony is dying from this crazy, and unexplicable production practice.

All MP3 manufacturers are dying to kill Apple's domination of the market. But, they keep releasing product after product without any proper planning. Sure Apple spends a fortune on marketing. But, they only have a limited number of products "iPod, iPod Shuffle (which it seems to be on they way out, and iPod Nano. That's it. These products evolve and are phased out or replaced with better products as the technology progresses. That's it. No, "20 or 25 different products released annually."

Simple. Produce a limited amount of items, support and develop them. Connect could have a chance as long as they orchestrate their strategy smartly.

But, if Sony continues this failing strategy, they don't stand a chance.

Sony rightly envied Apple, but then copied all the wrong things! iTunes is such a success because of the iPod, and vice-versa. There can be no doubt that being the first to hit the market with an easy to use packaged solution for legal music downloading had a huge impact on its success. You can't copy 'first to market'. Not without a time machine anyway.

The next (and only other, in my opinion) reason for iTunes/iPod success is and always has been Apple's forte: User Interfaces. Apple seems to know exactly what the user wants in an interface and goes right for it. The styling and UI of the iPod, together with the timeliness of iTunes, all together in an easy to use, relatively inexpensive package is the equation the equalled Apple's huge hit. You can possibly better the UI, but you can't catch Apple.

Sony rightly envied Apple, but then copied all the wrong things! iTunes is such a success because of the iPod, and vice-versa. There can be no doubt that being the first to hit the market with an easy to use packaged solution for legal music downloading had a huge impact on its success. You can't copy 'first to market'. Not without a time machine anyway.

The next (and only other, in my opinion) reason for iTunes/iPod success is and always has been Apple's forte: User Interfaces. Apple seems to know exactly what the user wants in an interface and goes right for it. The styling and UI of the iPod, together with the timeliness of iTunes, all together in an easy to use, relatively inexpensive package is the equation the equalled Apple's huge hit. You can possibly better the UI, but you can't catch Apple.

in a word - success.They got such big heads over the CD triumph and ever since have been trying to invent the next new standard that the world will license. It aint gonna happen. And it certainly aint gonna happen by foistering proprietary technology on the world simply for the sake of being unique: (see examples listed in other posts such as memory stick, etc.)Consumers have no interest in rebuying solutions to technology issues that have already been solved by other providers unless the solutions offer substantial and unprecedented advantage to them... what does the memory stick offer than other flash media does not? Nothing.Add to that the huge decline in hardware quality in the past 10 years, add to that the huge mis-step with the rootkit, add to that the desire to control consumers instead of free them (the minidisc was a good idea, just ill-timed and not promoted correctly - atrac is just a horrible idea aimed at locking consumers into Sonyland)...

It all adds up to the same problem facing corporations the world over: consumers aren't interested in boosting your bottom line. If you aren't providing a service to them, one that they actually want, they have no incentive to support you at all. You are not ENTITLED to profits, you have to earn them.

I was the biggest Sony fanboy... now I'm a hater. I've been used, betrayed, taken advantage of, and the only reason I wasn't assaulted by the rootkit offensive is that I had already given up buying CDs. Meanwhile all my old Sony hardware is slowly being replaced by non-Sony alternatives, which represents a real financial loss to Sony.

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